The Basics of Buying Boat Insurance - Components of a Marine Policy
For most of you the information here is repetitive, however, by posting this article, I am hoping that those that are new to buying marine insurance will benefit from the information that this article offers. I personally have not written this article, but found it as a great informational source for those that want to better understand a marine insurance policy and it's various components.
Written by Alan Sorum - April 24, 2007
"Most boaters realize marine insurance policies differ from what is available for a car. Variations exist in the basic coverage provided by both types of policies and not knowing these distinctions could hurt your bottom line after a loss.
Marine insurance is composed of two broad categories, liability and physical damage coverage:
Liability Coverage - This insurance coverage pays the costs that might be due third parties for injury, loss of life or property damage. These would be people besides you or your immediate family injured in an accident. It will also cover legal expenses that might arise from defending an accident related lawsuit. Physical Damage Coverage - This portion of your policy pays for the cost of damage to boat itself and its related machinery. Polices may limit payments due to weather or vandalism. Try to purchase an "all risk" policy that does not list specific exclusions to its coverage. Ensure your policy covers all the equipment found on the boat and insures it while being transported or stored at home.
Physical damage coverage can be settled on an agreed or actual cash value. The difference could have a major effect on your ability to replace a boat or major component.
Agreed Value - The policy will cover the cost listed in the insurance agreement for the boat after a total loss. Actual Cash Value (ACV) - The policy pays only what the vessel is actually worth based on age and condition. This coverage will be less expensive, but provides less coverage for replacement or repair of a damaged boat.
These are several other insurance options available for boaters:
Medical Payments - Persons on-board are covered for their reasonable medical costs associated with the accidents or incidents on the insured vessel. Coverage can include things like ambulance fees and hospital charges. Some policies will cover costs associated with swimmers and skiers that use your boat. Towing and Assistance - Coverage of emergency assist towing, emergency repairs, and providing fuel while out on the water. Personal Property - Covers the loss of personal items that were on-board a boat involved in an accident. These could include things like cameras, cellular phones, fishing equipment, and clothing. Uninsured Boater - This insurance covers the loss of your boat caused by a boater operating without liability insurance. The cost of this insurance is low compared to the risk, there are many boaters out there that don't carry insurance. Oil Pollution - The cost of responding to and cleaning up after a fuel or oil spill can be staggering. Many boater don't anticipate this issue until their vessel sinks and it causes a spill. Commercial vessels routinely carry this insurance and many recreational boaters have added it as well."
I would like to add the "Agreed Value" and "uninsured boater" are very important, and the biggest screw up situations I see. This coverage may cost a little more, BUT IS SO WORTH IT.
I would like to add the "Agreed Value" and "uninsured boater" are very important, and the biggest screw up situations I see. This coverage may cost a little more, BUT IS SO WORTH IT.
With boating season on the horizon and some buying new boats, trading up or even entering the performance side of boating for the first time... I think this article is a good one to re-read.... Please make sure that you have the appropriate coverages for YOUR NEEDS AND SITUATION.
If anyone needs help reviewing their existing coverages, we are here to help so feel free to email or give us a call.
Offshoreonly Advertiser
Gold Member
Platinum Member
